Marking its way back to the age of zero interest rates, the Japanese central bank is said to have lowered its standard interest rate to a range of 0% to 0.1%.

This however cannot be termed as a very big change, for, the previous rate too was near about 0.1% but, it surely is a step towards the zero interest rates era.

In the middle of fears, of the weakening of the economy in Japan, the Bank of Japan is said to have decided to buy Japanese Government bonds. These would also include commercial paper and other asset-backed securities. A total fund of ¥5 trillion or $60 billion has been set for the same.

Ever since July 2006, this is the first time that the central bank has introduced the policy of a zero interest rates.

Japan, which is the third largest economy in the world after the United States and China, is at present threatened, for, there are fears about the strong Yen and persistent deflation affecting the economic recovery in Japan.

Hirokata Kusaba, an economist at the Mizuho Research Institute in Tokyo said “Though there will be debate over the effects of the monetary loosening, I believe the Bank of Japan has done all it can at this time”.